PURPOSE OF REPORT

The Capital Strategy provides information on how capital expenditure, capital financing and treasury management activity contribute to the provision of a Fire and Rescue Service. This includes information on how associated risk is managed and the implications for future financial sustainability. It summarises the overall processes and procedures that govern the purchase and financing of assets in order to enhance members’ understanding of these technical areas. The report incorporates the Prudential Indicators and Treasury Strategies.

EXECUTIVE SUMMARY

The revenue and capital budgets for 2021/22 were approved by the Fire and Rescue Authority at its meeting of the 9 November 2020. Members approved a net revenue budget of £37.07m for 2021/22 with a further £3.08m approved for capital expenditure. The Capital Strategy has been prepared using the relevant data contained in the revenue and capital budgets approved by Members and from various policies and procedures that are in place to manage the purchase and financing of assets.

The report at appendix 1 provides further details relating to the Capital Strategy along with detailed information with regards the Prudential Indicators for 2021/22 to 2023/24 and the strategy to be followed regarding borrowing and investing the Authority’s funds in the financial year 2021/22.

OBSERVATIONS FROM THE AUDIT COMMITTEE

This report was presented to the Audit Committee on the 25 January. The Audit Committee is tasked with ensuring effective scrutiny of the treasury management strategy and policies and based on its findings make recommendations to the Fire and Rescue Authority. Members of the Audit Committee recommended the report for approval by the Fire and Rescue Authority.
 
RECOMMENDATION

That Members approve the Capital Strategy which incorporates the minimum revenue provision policy, the Treasury Management Strategy and Prudential Indicators.

INFORMATION

The strategies in the report have been prepared using guidance from the Treasury Management advisors, Arlingclose, used by Conwy County Borough Council who has the responsibility for the Fire and Rescue Treasury function.

IMPLICATIONS

Wellbeing Objectives This report links to NWFRA’s long-term well-being objectives and ensures that the purchase of assets to support front line service delivery is prudent, affordable and sustainable. The Capital Strategy ensures that there is sufficient investment in infrastructure to enable the service to provide emergency responses and prevention work well in to the future.
Budget Budget is set annually for capital financing in line with the Treasury report.
Legal The regulatory framework is set out in the appendices to the report.
Staffing None
Equalities/Human Rights/Welsh Language None
Risks Investment of surplus funds – there is a risk that the financial institution in which the Service’s funds are invested could fail with a loss of part of the principal invested. However, one of the purposes of the report is to mitigate this risk.